Hansteen has purchased a portfolio of seven multi-let, urban industrial estates on Newton Aycliffe Industrial Estate in County Durham, from M&G. The purchase price of €14m (£12m) reflects a high net initial yield of 8.5% and a low capital value of €44.3 (£38) psf. The portfolio comprises 53 units totalling 341,620ft², with individual units ranging in size from 820ft² to 32,648ft². The contracted rental income is €1.2m (£1m) per annum with a total current ERV of £1,27m per annum. The units are let to 40 tenants, which are a mix of local, regional and national companies, on 45 leases providing a diverse and robust income stream. 32,942ft² (9.42%) of the space is currently vacant, providing an immediate opportunity to enhance income through letting the vacant units.
The properties are within the wider Aycliffe Business Park, the second-largest industrial park in the northeast, comprising around 980 acres, 500 businesses and employing more than 10,000 people. The park is the biggest single employment area in County Durham and forms a key part of the northeast economy.
Derek Heathwood, UK Property Director at Hansteen, commented: "This purchase fits our acquisition criteria perfectly, being significantly below replacement cost, with low rents capable of further growth, vacant units and in an area where we have significant holdings and a regional team that can add real value".
